It’s been a while since the last edition of the old Squirreling Gone Wild series, and a recent discussion with a former coworker – where we were recalling old stories – got me thinking of an episode of cheapskate behavior of one of our former colleagues. I thought I would share it as the 34th edition in the series, and get your thoughts on it.

In reality, the idea that this person would engage in cheapskate behavior wasn’t a total surprise. She is the person who was obsessed with free food in the office, to the point of claiming to spend only $100 per month on food due to taking leftovers from meetings and department lunches. It was something that she could eventually laugh at a bit, and really she took pride in it. Or, should I say, threw her pride out the window by hustling for free things more than she hustled to get work done. Hey, it was entertaining if nothing else!

The Frugal Co-worker on a Business Trip

Anyway, there was a point in time where a few of us had to travel to Philadelphia for a business trip. It would have been a fairly short trip, just one full day there, and two nights. We would get in the night before the meeting, have the meeting the next day, then stay that night and fly back in the morning.

So, we often collaborated on booking flights, to see if we could travel together. That part wasn’t really something I needed to do, and frankly I had no problem traveling alone, but the culture in the office was to have people travel together. No problem, I can do that. Three of us got on the same flight, but then this other person – let’s call her “Jane” – booked an earlier flight to Philadelphia on her own.

Then, the day of the meetings, we were all going to go out for dinner later in the evening. Jane tried to avoid the conversation, then said she was going to be busy. We thought maybe she knew people in town who she wanted to visit, or maybe she was just tired. Nope. Ultimately, she said that she only had a short period of time to go shopping, and had a lot to buy.

Why? She said that she could save on sales tax if she bought things in Philadelphia. Apparently, the sales tax on clothing there was much lower than it was in Illinois. So Jane felt that she had to maximize her time that evening to rush to stores to buy clothes and shoes. When our meetings ended that day, she literally packed her bags and rushed out the door without saying goodbye! She also took a different flight back the next morning, so we never saw her until being back at the office.

Now, I’m cool with people marching to the beat of a different drummer. Conforming can be overrated. That being said, when you’re dealing with people with whom you work – and the culture associated with that workplace – sometimes you have to be cognizant of “expectations”. In Jane’s case, she blew off those expectations and a dinner with coworkers just to save some money shopping.

Was the benefit of saving some money worth the cost of alienating coworkers? Again, not that I cared that much – and frankly, I smile when I think about it. It was funny at the time! Yet, in reality it was weird and it bothered the other people on the trip. I don’t think it could have been worth it for her to save a few bucks on clothes, in the bigger picture.

My Own Business Trip

I actually had a somewhat similar situation present itself to me a few years before that. I was on a trip to Boston, where a group of coworkers and I were at a conference. My boss was there as well, and all of us had dinner plans for that evening.

During the day, a supplier talked to me about sports, just making small talk. I had mentioned that I had always wanted to see a game at Fenway Park, and would have really liked to do so if I had time. At that point, the salesman in him pounced like a tiger – saying that he had tickets for that night’s Red Sox game, and that he could keep a ticket for me. FREE!

What to do? I enjoy seeing different ballparks, and especially appreciate historic venues. We have one here in Chicago (Wrigley Field), had another one a few decades ago – the old Comiskey Park – that I visited often as a kid before it was torn down in 1990. I made sure to visit the old Tiger Stadium in Detroit before it was shut down back in 1999. As you can see, I like the old parks, and Fenway is one that would be a treat to see.

But what about that dinner with the boss?

One might think I was shortsighted in my own way, but I actually turned the guy down. Instead, went out to dinner with my boss and coworkers. Sure, it was a really nice dinner. But I have to say, going to the ballgame would have been much more fun!

Of course, it would have looked very bad if I chose a great fun evening over dinner with the group. Perceptions matter, and ultimately our income matters more. I thought it would have been penny wise and pound foolish to go for the free tickets and the great memories, instead of prioritizing the norms of the workplace. I chose the latter, thinking of the bigger picture.

Besides, who’s to say that I couldn’t go to Fenway another time in the future?

My Questions for You

If you were that coworker, would you have taken advantage of the opportunity to save money shopping? Or, would you have given that up and conformed to the norms of the group and gone out to dinner with coworkers?

If you were me on the other trip, would you have taken advantage of the opportunity for a cool life experience on someone else’s expense? Or, would you have done what was expected on the job, and gone to dinner with the boss and coworkers?

Have you ever seen anyone lose respect by being cheap in any situation?

When I was younger, and just out of college, I felt like I had finally hit the “real” world. Not that being any younger means that you aren’t in the real world, but for some people, it seems like there is some kind of bubble they’re living in all the way through 22 years old. It’s all about academics, having fun socializing, and preparing for the future for some people, it seems. Yes, I was one of those people. I know that many of you reading this weren’t (or aren’t) but I was.

I was fortunate enough to have a full-time job right out of college, having been recruited for the role. After that, it seemed like things had changed. All of a sudden, I had my own apartment with no roommates, along with a salary. I also had some basic responsiblities, such as taking care of my place, paying the bills, and routine things like that. Otherwise, I was free to do as I pleased.

How times change! Being older now, with kids and much bigger responsibilities, I can look back and think about how I handled myself back then and the moves I made. Overall, I think I did fine, and really worked hard in some areas of life. I wouldn’t have gotten to this point without that hard work, and the good decisions that I did make.

However, I certainly didn’t have all the answers back then. Not that I do now, of course! Yet I do have the benefit of life experience and perspective now, and can make some assessments on what moves I could have made. Based on my own life, as well as the experiences of countless others I know, I have some thoughts as to what financial moves would be good for people in their early 20’s to consider.

Here are my ideas for 5 top money moves for people in their early 20’s recently out of college:

1 ) Build Your Career.

Now, I say this knowing that not everyone knows exactly what they want to do. Some people go straight from undergrad to grad school – medical school is one example. Such people were probably highly driven early on, very bright, AND knew what they wanted to do. There are many other people with the first 2 traits, but maybe not the notion of what they want to do. This is okay, as we often need experience in order to figure some things out. But figure it out we must.

For many people the first big hurdle these days is finding that first full-time job. Once obtained, this the time to gain experience and work the long hours to get ahead. Later in life, with kids in the picture, you won’t have as much time or energy to do this. Get a foothold, build a professional network with value, and start making your mark. This early experience can be a great building block for the rest of your career or even future entrepreneurial efforts. Speaking of which, you shouldn’t be stopped from entrepreneurship early on.

2) Live Modestly

I could say live appropriately, but what I mean is that we should avoid spending excess money on pricey apartments. Now, this doesn’t mean we should compromise safety or other basic, or purposely sign up for some rotten commute. Rather, let’s try to spend as little as possible for housing.

I actually rented at a very nice apartment complex right away, and it was the very best one in the area. I could have saved a fair amount of money by living elsewhere, but I wanted to live in a certain place. Live and learn, I suppose!

A good alternative might also be getting a roommate. Splitting rent and utilities can really help with savings efforts. An even better move might be living with parents, if it’s comfortable enough and they’re okay with it. I have to say, I don’t understand the mentality that many people have around their newly grownup kids not being welcome to come back home. While I moved out on my own when young, I also realize that in many cultures it’s totally normal and perhaps expected for multiple generations to live together. If parents and their kids could wrap their heads around the massive savings possible for the kids, instead of viewing it as shameful freeloading, people could really save money and build a financial foundation.

3) Drive a “Good Enough” Car.

Nobody needs a really nice car when just starting out. I have 2 friends who made the mistakes of spending a ton of money on new vehicles. One guy bought an expensive sports car that was probably 2/3 of his annual income, then traded it in for different one that was just as pricey. He is now a successful high net worth individual who drives a 12 year old car, and says that he will drive that car into the ground. Clearly, he figured out what is important.

Another friend bought an expensive SUV when he got his first job, and told me he “needed” it, and wanted to “feel like I’ve arrived”. He’s now doing quite well, and seems really responsible.

There’s a good post worth checking out, with a car buying rule, that fits the concept of driving a “good enough” car.

4) Don’t Waste Time on Mr. Wrong or Miss Wrong.

This might not seem like a money tip, but it is. I’ve seen people waste untold amounts of time and money on people who were not right for them. It might have been apparent to others, but not them. Just imagine if they would have valued what they as individuals brought to the table, and didn’t settle for something less?

A big thing is choosing to live in a city you don’t want to live in, just to follow someone. Okay, maybe that can work out well and I know it does for a lot of people. But tread carefully! I know one guy (who was actually in his later 20’s) who found his dream job with pay that – from what I heard second hand – was truly exceptional and well beyond what he was making before. He took the job, then quit and moved away after 1 month to be with his “true love”. Well, the true love ended up dumping him within 1 week. Yes, 1 week! No love, no job, and back home he moved with his finances severely hurt.

He threw away a great career and life opportunity. Now, I haven’t kept in touch with the guy in a few years, so I don’t know what he’s up to now. Little consolation for him, but hopefully others can learn from his fiasco, and not lose valuable time, money, and financial potential on a situation that’s not a great fit.

On the bright side, what if you do find Mr. Right or Miss Right? You’re blessed, and don’t let go!

5) Don’t Carry ANY Credit Card Debt

Credit card debt is not good to have. Sometimes people can get into difficult situation that requires them to pursue debt as help. However, many people carry credit card debt because they aren’t able to discern wants from needs. When they figure it out, it can be painful.

There was a guy I worked with who also bought a nice car that was beyond his means – I suppose we can add him to the two I mentioned above, as I just thought of him now. Anyway, this guy not only had that car, but also went to all kinds of expensive concerts and sporting events. We were joking around with him at lunch about him not knowing what a savings account was, and he just brushed us off with a smirk and said he didn’t care about any of that stuff. Life is too short, he said! By the way, this guy was a financial analyst. Go figure.

Well, a few years after that, he told me that he would be stuck paying bills until he was 30. He later met a woman who he ultimately married, who shaped him up financially. Over dinner, he told me how she hated any and all debt, and how she forced him to change. He went on an introspective tangent where he stated that he must have learned his habits from his parents, who simply used credit as an easy tool to get money when needed for anything. It was great to see him learn his lesson, but clearly it took him years to recover, and a smart wife to teach him how things work!

How it All Ties Together – collectively, these moves involve making sure we earn money, and then ensuring that we avoid common traps that cause us to overspend. Ultimately, main idea here is to save as much as possible when younger. Then, we can invest intelligently and let compounding work its magic. Later in life, you’ll be VERY glad you saved and invested. I know I am.

My Questions for You

Did you follow (or are you following) any of these tips on money moves in your early 20’s?

Which ones have worked best for you, and what do you wish you could have done differently?

We have all heard about diversification when it comes to our investments. Most people tend to believe that putting all your eggs in one basket is a highly risky approach to doing things.

This could apply on several levels. First, in terms of diversification among asset classes. For most of us, it’s probably not the best idea to be investing 100% in stocks – or bonds, or any other asset class. Even if you did diversify well, you probably wouldn’t want to put all your money in one particular investment in an asset class. For example, within stocks, you wouldn’t want to put all your money into one particular stock – diversification within asset classes is important too.

All this being said, I think we can agree that for the average person, investments ought to be effectively diversified. But what about income?

There is regular chatter among many personal finance bloggers about the value of diversifying income streams. But I wonder this: among most mainstream (non-PF Blogger) folks, why is diversification of income not seen as being as critical as diversification of investments?

Think about it – most people will not put all of their investments into one particular company. Sure, there are some who don’t believe in the concept of diversfication vs. investing in what you know, but that’s not super common. By default, if people have a 401k, they’re probably invested in many different companies by virtue of having mutual funds. Or, if they own a home, they might have some equity in place. Perhaps they have bonds, or cash. Either way, it’s highly unlikely that their investments are tied up into one single company.

However, when it comes to income, many people seem to view it differently. Frankly, I used to be the same exactly way until the last year or so. This meant looking at a job as THE source of income. Without a job, there’s no income.

Realistically, that’s probably the case with most people, I’d assume. It’s the way our society seems to be set up. However, this mindset seems to lag the sophistication we collectively have about diversification of investments. Shouldn’t income be diversified too?

If the primary source of people’s day to day money needs is their income – while savings are for retirement and other longer term needs – then it seems to make sense that income should be protected. This can happen by having a great career, but even then – you could be at the mercy of your employer, your industry, or economic conditions. So, why not diversify income sources?

Again, while many personal finance bloggers think about this, I wonder why this concept of income stream diversification isn’t has seemingly top of mind as investment diversification?

Recommendation: let’s consider it to be essential to have multiple sources of income.

If we wouldn’t invest all our savings in one company, why invest all of our income potential in one company? Let’s really take action and work on multiple streams of income in the New Year!

My Questions for You:

Why do you think it is that many people might be hesitant to invest all their money in a particular company, but will totally depend on an income stream coming from one company in employment?

Are you taking action on generating an income stream that’s different from your day job?

Integrity is priceless. Most of us value ours, and choose to deal with others who also have it. This extends beyond personal relationships into business dealings as well.

This edition of the Squirreling Gone Wild series covers a time when promises were made about an upcoming bonus at work. A number of folks got excited about it! However, things didn’t go quite as planned – for the employees who were so excited. This included me.

Background

This occurred at a job I had in the 90’s. It was at a job not long after college, where I started in an entry-level position. The company was probably not a household name, but it was fairly prominent within it’s market.

Anyway, a group of us entry level people had been working a ton of extra hours. Now, we knew that there would be a period of time where this would be expected, but we were asked to work extra days and longer hours for more time that originally communicated to us. Mandatory Saturdays made for 6 day weeks for some time, and it wasn’t fun. We were getting paid very little, but I was of course committed to working hard and getting whatever experience I could out of it.

Met some good friends there too. That tends to happen when you’re in an entry-level position with a number of peers at about your age. We got through it with a lot of joking around about the circumstances.

The Carrot

After this period of mandatory Saturdays and extra workload dragged on longer than we expected, there came word of a potential bonus in the works. We had worked really hard, so this was a nice incentive for a group of younger, hungry people out of college. This bonus was the proverbial carrot dangled in front of us, as an incentive to continue working hard.

So, we were happy and proceeded to get that extra boost in motivation. We were under the impression that there would be a bonus, but there was no specific date given. Just words indicating that it was being worked on, the exact timing isn’t certain yet, etc. Yet we just assumed that of course, it would happen.

As time went on, we started to wonder when the bonus would come. We had poured our energies into our work, thinking that we were going to be appreciated and rewarded for our efforts – especially since we were told so. There was a spike up in motivation that they got from the group as a result of the expectation of the bonus. Yet where was the bonus? After a while a sick feeling began to take hold that we weren’t going to get one. It seemed unfathomable.

Finally, we got an email which addressed the topic. It had been months, but we were also separately told a date: November 1st. What a magical date, that November 1st would be!

The aforementioned email had a reassuring comment that we have not been forgotten.

The Squirreling

November 1st came and went without a bonus. At this point, it was exasperating.

Now, keep in mind that we weren’t making much money, so the bonus wasn’t going to really be all that much money anyway. But at the time, it was kind of a big deal, and even if irrational – people thought they were going to get this money.

One guy who had quit had talked about demanding receipt of his bonus. It caused some laughter among those hearing about it. Another guy, who was really nice guy but a hard luck person, kept on saying that they’ll probably give it to us. He seemed to think that these things just take time in some cases.

Wishful thinking. We never got the bonus.

Yes, it never happened! In fact, they never gave us a detailed explanation. Again, all kinds of rumors floated about the bonus ended. Whatever the case, substantiated or not, these rumors just fueled the disappointment people had.

Now, I can admit that actually did get some very good experience there, and worked with some pretty cool people. A group of us that were friends would constantly joke around about the bonus. Have to say, we handled it pretty well at the time. What else could you do, but laugh? And leave, which we all did. We could still get in touch on November 1st and crack a joke asking if they got their bonus today.

Might as well laugh about it, right?

My Questions for You:

Have you ever been misled or burned, expecting money but never receiving it?

Have you heard of situations where people didn’t get paid for a service or product?

While this example happened some years ago, how would you handle it if it happened today?

In order to make money, we generally have to work. For us to make a lot of money, we generally have to be willing to work more hours. That’s a common view, and one I don’t necessarily disagree with. I’ve been known as someone who’s worked some super long hours at times, includes late nights in the office when need be.

That said, is there a point where too much work can be a bad thing?

It might be perceived as being bad to say, and almost lazy to proclaim. However, forging ahead with tons of hard work to bring in money may be harmful to people in the long term. This appears to be the conclusion of a recent study, which was summarized in this New York Times article.

The specific, noteworthy finding is that those people who work 11 or more hours per day were clearly more likely to develop heart disease over a 12 year period of time than those who work 7 or 8 hours per day. In fact, those working the excess hours were 66% more likely to have a heart attack or even die from one.

There’s something to be said for moderation. For many of us, it’s just not possible to get something for nothing. This applies in many aspect of life, and it looks like that might be the case in terms of working long hours, too. The chronic stressors related to taking on that significant level of work might lead to health problems. For some people, it’s like robbing from Peter to pay Paul.

I know that many people might dismiss this notion of regular 11 hour workdays being unhealthy. Well, hey – that’s what the study does seem to indicate though!

As I said earlier, I’ve had many instances in the past where I worked long hours. I mean, I’m talking stretches of 70 to 80 hours per week. I felt like a warrior doing so, going out to battle and bringing home the prize of a great performance review and a chance at a promotion. The reality is that this is bad for one’s health makes me wonder what I did to myself during those times. Of course, I have to say that it’s not entirely surprising that this isn’t good for us. It’s just not as sustainable the older you get. Not just in terms of energy level, but family responsibilities as well.

A recent post on Financial Samurai discussed the topic of hard work and the 40-hour workweek. It was a great discussion, and one of my own comments was that nobody is entitled to be be rich. It has to be earned, and expecting riches while not putting in the necessary work is a sign of entitlement. Many people who complain about having to work a 40 hours week (when younger and healthy) and then complain about not getting ahead financially might be expecting to get something for nothing. Or, perhaps more accurately, they’re expecting to get something of value by not giving enough value in return.

Which is what I said a few paragraphs above about working tons of hours. To do that, and expect the same level of health and family life, may not be totally realistic. Kids do need parents to be present and attentive.

My takeaways are:

Life is clearly about choices. If you don’t want to work, don’t expect wealth. Of course, if you want to push your mind and body by working long hours to get even more wealth, you might be trading some health for it. Sleep is important for wealth creation, as we’ve discussed here before.

Maybe it’s all really about time management. Instead of regular 60 hour weeks, perhaps it’s better to learn to be efficient with regular 45 hours of work.

If one is doing what he or she truly, absolutely loves to do and has some flexibility in where and when work can be done, maybe the work will cause less stress. Thus, the impact might not be the same as with other jobs. Who knows, maybe there’s something to that?

With few well-paying fulltime jobs going around, plenty of part time jobs are up for grabs to anyone willing to take them. More and more people have been picking up second jobs to supplement their income since the global credit crunch kicked in, and for those who work freelance having a secondary job can almost be a necessity. You should think carefully before taking the plunge into a second job though and there are a number of elements you should take into consideration.

Before you even consider looking for another job, you should first check your contract for any existing employment. Many contracts have clauses that may prevent you from taking a second job with anyone who could be seen as a competitor or might require you to receive written permission from your current employer.

Once you’re sure of your position with your current employer, you might want to take some time to consider just how lucrative a second job might be for you. Many people forget to take tax into account when chasing a second job and are disappointed with the size of their paychecks as a result. Taking a second job might even push you into the next tax bracket, which could actually bring your overall take home pay down. You will also need to be careful that you don’t overpay tax if you don’t fall into the next tax bracket – merely having a second job can make the tax office whack emergency codes on your tax account and the money lost to this can be difficult to recoup. If you are in receipt of working tax credits or child tax credits you may lose these if you take a second job, so weigh up the costs and benefits carefully.

If you have a family you should also take the time to consider how you taking a second job is going to affect them. Does this mean you won’t be able to see children as much, or take them to afterschool clubs and activities? Will your relationship with your spouse suffer? Unless you have no choice but to take a second job, you might find that there is a richer reward to be found in investing in your family than in another job.

A second job can bring massive rewards and can make a huge difference to you and your family’s lives, but take care to consider all your options before jumping in head first.

Change is one aspect of life that’s a constant. When you think about it, very little stays exactly the same in our society. Things evolve in one way or another, some fast and others very slowly and incrementally. Along those lines, the workplace is always changing too. Over the years, things have changed in many ways in the workplace, making it different than it was even a half generation ago.

Today, the workplace continues to evolve. I recently came across a piece from US Newsthat discusses trends at work that will impact us in our day-to-day professional lives as we try to make and save money. we try to Here are the trends they identified, along with my comments:

Flexibility Abounds. I agree with this, as I’ve seen companies show a bit more flexibility in this over the years. In past days, it would have been unheard of to offer flexible hours or even occasional work from home arrangements. Today, such situations are not at all uncommon, and even the norm in certain organizations. This is a trend I like! One thing that wasn’t noted in the article, however, is that flexibility goes both ways here. Companies often expect more flexibility as well, as technology makes you more accessible. With smartphones, email can be checked anywhere and at almost any time. If you’re not doing it, your colleague might be currying favor with the boss by being flexible. Anyway, when you net it all together, I think flexibility can be a good thing when managed well.

More People Are Working For Themselves. To some degree, the barriers of entry to entrepreneurship have been lowered. Get a domain name, host your site somewhere, and you’re in business! No need to have a storefront! I think it’s important for people to focus on the most important sources of revenue first, but the way things are trending, I think that the pursuit of multiple streams of income – even if you’re trying to make extra money on the side – can be important. Plus, lifetime employment is a relic of a prior generation.

Not Sticking With One Job For a Lifetime. I know people of a generation older than me that spent 25+ years working for the same organization. Among the long-term friends I have, I can only think of one person who has kept the same job for the last 10 years. Most others have had at least 2 during that time. Some have had 5 or more during that time frame, easily. This is just the way it is now. Personally, I like long-term loyalty and am not opposed to the concept, but the velocity of change in business has just increased significantly it would seem.

Work-Life Balance is a Priority I agree with the article, in that more workers – particularly younger ones – are expecting work-life balance. I have seen that in my experience, working with a guy 25 years older than me at a prior job who seemed shocked that any guy would want to leave work by 5:00pm to see his young child. I have a perspective that’s perhaps more aligned with GenY workers than even my those in my own group, Gen X. Anyway, I do think this is important to workers these days. However, with a tougher job market within the last few years than in prior decades, employers have the power back in their corner. It’s harder to make such demands on employers when they see tons of qualified candidates wanting jobs with limited openings. So, while many of us value balance (while still working very hard, of course), I’m not sure that now is the time for pushing boundaries for many people.

Personal Branding is All the Rage. I tend to agree with the article. Personally, I think Linkedin has really taken this to a new level. Your online professional brand is right there, in a centralized place for anybody to see. Also, your social media activity can be viewed online quite easily. The tools are available to build a great personal brand, but they’re also there to derail your personal brand. Make wise decisions!

Long-Term Unemployment Could be Here to Stay. Have to agree on this one, unquestionably. Things do change, but at least for the the foreseeable future, there will probably be plenty of people unemployed for 6 months or longer – which is the timeframe that is used to determine long-term unemployment. The implication here, from what I see, is to ratchet up your job performance, manage your career more carefully, and maintain a more robust emergency fund. As I’ve stated before, people should keep a bigger emergency fundthan the 3 to 6 months that’s typically suggested.

My Questions for You:

What’s your take on these changes? I’ve given my view on each, including some implications – what do you think?

These days, the job market isn’t exactly robust and thriving as it might have been in years past. Sure, things were especially tough a year or two ago, but it’s clear we’re still in a down cycle these days. The consequence of this is that employers can be picky when evaluating prospective job candidates – particularly in the resume screening phase.

A recent post on Couple Money about resume mistakes included a link to an interesting article in Daily Worthon how having an old email address could impair your chances to land a job. In this case, old refers to uncool. Examples that were given of such email addresses were those of Yahoo, Hotmail, and AOL.

Yes, if you have a personal email account with one of these domains, you may not be seen as being tech-savvy or with the times by some people. That’s the implication! One person was noted as saying that applicants with such email addresses are given “demerits”, and another person indicated that people with those domains are “immediately eliminated”.

Now, I would have to think that it wouldn’t matter to most companies if you have an email address with one of those domains. However, clearly there are some employers who do seem to care. Perhaps it depends on the industry in which the company is operating, or the culture of the company. Either way, what type of personal email address you have does matter to some people.

My instant conclusion on this specific matter was that having an “uncool” email address can cost you money!

At first blush, that seems far fetched as a general statement, and a bit extreme. However, while it probably won’t hurt you in most cases, it probably doesn’t help either. Therefore, why not get a more “socially acceptable” email address domain – like Gmail?

When interviewing and competing against other qualified candidates, the best person doesn’t always get the job. That’s reality. Also, there are innumerable subjective assessments that people make about candidates, and many personal biases can come into play too. It’s just the way it is.

The same goes for other aspects of the job hunting. How we dress, what we say, how we format our resume, how we shake hands….all are example of things that, unless glaring, don’t really indicate who is the most qualified person for the job. Somebody could be really smart, tenacious, and have great people skills – yet not get a job due to a seemingly extraneous factor.

Weird, isn’t it? It just seems so inefficient!

That’s the reality of competing for a job these days, so fair or not, it’s best to be aware of such unwritten requirements and go into it by putting yourself in position to succeed. It impacts your finances!

My Questions for You:

What do you think about the premise that an uncool email address can disqualify a candidate?

Have you seen or heard of people getting passed over for a job opportunity due to something seemingly inane?

The following is a guest post by Deidre Lin. Deidre is an author, artist, advocate of Healthy Living and owner of TransFormX, a blog & website focusing on Healthy Living for Body, Mind and Spirit in the middle of Chaos.

I recently replied to a Squirrelers post relating to how time is moneyand how long it takes to work to buy an item. It got me thinking about the different ways in which this situation impacts people and how being self-employed dictates most, if not all, of my spending habits.

I’ve been self-employed for almost 2 decades now, though not in the same profession. Being self-employed certainly has advantages and of course has its downside too. We all know that everything can’t be perfect all the time. Perfect or not, being self-employed changes one’s view on budgeting, time and spending.

Consider that if you are self-employed you must not only bring in the work (marketing) you will also be responsible for the billing of invoices and then collecting the accounts receivables and all of these activities take time out of the day. No, most clients will not pay up right away and usually follow the standard ‘net 30 days’ rule. If you are lucky you will have a few on a ‘cash’ basis and be able to collect within a couple of weeks. Others will be in arrears 90+ days!

As you can see this impacts budgetary and spending concerns immediately and the question then becomes; how does one handle this on a daily basis? Fixed expenses are handled one way and variable expenses are handled differently when budgeting for the self-employed situation. As with any budgeting endeavor, first one has to get a good idea of what the fixed and variable expenses are each month. Only then can you realistically plan your budget. Of course there are many other expenses that are involved with being self-employed, including taxes; but the following is to illustrate how different the budgetary concerns are.

The following are my tips for budgeting some self-employed fixed and variable expenses:

1. Insurance premiums – we all have insurance premiums no matter what our employment situation is.

a) Insurance premiums are categorized as fixed expenses because we are pretty much locked into this expenditure whether we like it or not.

b) Budget and pay insurance in bulk – meaning either 6 month or 12 month blocks. Schedule insurance renewals to come due during the busiest time of year for so that the incoming $$ is higher and more frequent.

c) Most insurance carriers offer a pretty good discount for paying 6 month or 12 month blocks – make sure to check this out.

2. Rent/Mortgage – we all have our rent or mortgage to pay no matter what our employment situation is. When renting, if possible, base the lease on where you are working (relating to volume of work in that area) and plan accordingly for the beginning and ending of the lease term to coincide with incoming monies.

3. Vehicle Payment – Obviously this is a fixed long-term expense even if the vehicle is leased. Most lenders will try and work with you on having the payment coincide for whatever day during the month is necessary. Again, it may be prudent to schedule the payment for the middle of the month to ensure that your month-end accounts receivable has been received and processed.

4. Variable expenses such as food, utilities, cell phone and internet. These are variable expenses and some are more important than others.

a) These are the easiest expenses to schedule during the month and can be paid whenever there is an opportunity to do so – before the date due.

b) Another option is to set them all up as an automatic payment in the middle of the month like the vehicle payment.

5. Miscellaneous expenses that occur. When self-employed, one must be prepared for the unexpected expenses that could ruin your monthly budget. The best way to handle this is to set aside a specific amount for this eventuality and do not dip into it for any other expenses. Similar to an emergency account.

6. Vacations…Taking a vacation when self-employed is an interesting endeavor and is worse than a variable expense J Consider that if one is not working and billing clients daily – this directly translates to next month’s budget. If one takes off 2 weeks to go on vacation you can quickly see the effects of the interruption in cash flow, if not sooner than later. Yes, the vacation may be paid for in cash but the additional ‘cost ‘of your time must be factored in. Let’s say in a given work week ‘Tom’ bills out 4,000 in revenue (hmmm pretty nice week! Have any openings Tom?). He saves up for a vacation that costs 5,000 and he will be gone for 2 weeks. If he sticks to his initial 5,000 budgeted amount (and who really does on vacation?) he will have spent 13,000 when the 2 missed work weeks are factored in!!! Wow, hope the vacation was once in a lifetime “Tom”!

Now, as we all know it’s nice to be the chief cook and bottle washer. Personally, I would have it no other way and in many ways I appreciate the things I can but even more! Now, where did that Tom guy go? I wanted to do a bit of networking…

Wealth-Building Financial Lessons

Disclaimer

We are well meaning folks that are not investment professionals or financial advisors. Please feel free to have fun here, and take this information in the spirit of entertainment, as it is not financial or legal advice, For that, seek an appropriate professional. Your actual financial decisions are your own responsibility. Thank you.